China’s anti-corruption drive has led to the arrest or indictment of hundreds of high-ranking officials, as well as more than a million lower-level government representatives, since 2013.
Bribery of public officials remains a major problem across the developing world and in some developed countries, too. Studies have repeatedly shown that graft impedes economic growth and development, prompting governments around the world to intensify their efforts to root out corruption.
In a forthcoming paper in Management Science, we and our co-authors employ this methodology to estimate Chinese government officials’ “unofficial” income. We found that, on average, Chinese officials’ so-called “grey income” amounted to 83% of their formal salary. Notably, this figure increased sharply with rank. For example, the unofficial earnings of low-level civil servants were just 27% of their official income.
To understand which of these scenarios applies to China, we estimated the proportion of officials at specific administrative levels likely to have unofficial earnings. Some have argued that public officials resort to bribes because their wages are low compared to what they could have earned in the private sector. To evaluate this claim, we considered factors such as education, work experience, age, and gender.